‘The worst is yet to come’: IMF issues stark recession warning (2 min read)
The IMF has downgraded the forecast for the global economy again and warned the worst is yet to come. They expect more than a third of the global economy will fall this or next year and the three biggest economies, the United States, European Unions, and China, will continue to stall. The IMF believes that global inflation will most likely peak this year but will remain elevated longer than expected. Central banks rising rates too quickly could aggravate a global downturn but dialing back will also allow inflation to run free - either way poses a risk to the economy.
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Uber, Doordash plunge after Labor Department proposes change to gig worker classification (2 min read)
Shares of Lyft, Uber, and Doordash dropped between 6% to 12% after a proposal released that may reclassify gig workers as employees rather than independent contractors. If the proposal gets adopted, it will have a huge impact on these companies as they heavily relied on contract workers. The companies argued that the flexible hours are attractive to workers but activists disagreed and said the contractor model is just a method to save costs from workers’ benefits. The new proposed rule will still need to go through the regulatory process before it is adopted.
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American Airlines raises revenue forecast after strong summer travel season (1 min read)
American Airlines said their sales in Q3 will likely be better than expected thanks to the strong summer that helped cover the increase in costs. They raised the revenue forecast for Q3 to an increase of 13% compared to the same time in 2019. While revenues are expected to be higher than the 2019 levels, they also flew 9.6% less which shows passengers are paying more to fly. Shares of American Airlines and other airline stocks were up after the news. American Airlines will report their third quarter results on Oct 20.
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Alternatives ETFs Offer Bright Spots in Tough Market (3 min read)
Nearly all the US-listed alternative ETFs had outperformed the broader indexes this year by a huge margin. Alternative investments have often been overlooked by investors as they usually require bigger fees or the strategies are too complex for non-professionals. Some of the top performing alternative ETFs generated a return as high as 80% so far this year while the total stock market is down by 24%. Despite the stellar outperformance, alternative ETFs were only about 0.5% of the total ETFs inflow this year.
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Weekly ETF Flows Net Nearly $14B (2 min read)
US listed ETFs had $13.8 billion of inflows last week with the majority of it in fixed income assets as investors look for reliefs during volatile markets. Fixed income ETFs pulled in about $8.4 billion, almost 24% more than the previous week. US equity ETFs received roughly $4.5 billion in assets which is less than half of the inflows from the week before. More details on the top 10 ETFs with the most inflows and outflows are available in the article. It also includes the flows of asset classes and top performing ETFs year to date.
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Investing in FinTech in 2022 (7 min read)
Fintech companies have been growing rapidly in recent years. The fintech industry was valued at $110.57 billion in 2020 and is projected to reach $698.48 billion by 2030. Fintech shares have steadily outpaced traditional financial services shares since 2018 and were proven to recover much faster after market downturns. It is becoming more relevant in everyday lives through banking services, investment apps, and payment processing services. Digital payment services currently account for the largest portion of the global fintech revenue. If you are looking to invest in this industry through stocks, some of the top companies are Visa (V), Mastercard (MA), Intuit (INTU), and Paypal (PYPL). For exposures through ETFs, the Ark Fintech Innovation ETF and the Global X Fintech ETF are two of the most well known in this space. A complete list of fintech stocks and ETFs, and the breakdown of this industry are available in the article.
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That's it for today! You can reply to this email if you have any comments or feedback.
Thanks,
Thomas
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